By Peter Nurse
Investing.com - Oil markets surged Thursday, boosted by evidence of a return of demand in China, the world’s largest importer of crude.
AT 9:30 AM ET (1330 GMT), U.S. crude futures traded 9.2% higher at $26.20 a barrel, while the international benchmark Brent contract rose 5.8% to $31.46.
Prices were supported by data Thursday showing Chinese crude imports rose last month. Imports climbed to 10.42 million barrels a day in April from 9.68 million barrels in March, according to Reuters calculations based on customs data for the first four months of 2020.
Overall exports from China also rose against expectations of a sharp drop.
Adding to the positive tone was the news Thursday that Saudi Arabia, the world’s largest exporter, had increased its official selling prices, reducing significantly the price discounts it offers to its customers worldwide.
The market, which saw some physical grades selling at prices close to zero just a few weeks ago, was also being helped by production cuts by the Organization of the Petroleum Exporting Countries and its allies and in North America.
The latest data from the Energy Information Administration showed that U.S. crude oil inventory increased by 4.59 million barrels over the past week, the slowest weekly build since mid-March as domestic output fell further. While crude oil inventory at Cushing, Oklahoma increased by 2.07 million barrels, again the smallest build since late March.
That said, as the world starts to ease lockdowns, oil demand recovery will likely be slow and timid. All after, the latest data showed the number of Americans applying for initial unemployment benefits totaled 3.17 million last week, remaining at historic levels even as many parts of the country start to reopen.
Continuing claims, which record the number of people already receiving benefits, increased to a new record 22.64 million in the week ending April 25.